Webasto finds a way to boost U.S. output, not costs

Supplier shifts to a form of just-in-time delivery at Michigan plant

DETROIT -- Rising new-car sales in the United States and a big jump in the number of consumers opting to equip their vehicles with sunroofs put Webasto Roof Systems Inc. in a bind.

After sales crashed in 2008, the German supplier closed one of its U.S. roof systems plants and reduced its local work force to ride out the recession. Now, with sales booming, Webasto's automaker customers are pressuring the company for more product.

Webasto Roof Systems CEO Erik Roeren faced some tough choices earlier this year in figuring out how to boost production and keep costs down when he wasn't sure whether the recovery had legs.

Roeren's options were to reopen an old plant, build one, expand an existing one -- or figure out how to increase production in the same manufacturing space and avoid a major capital expenditure.

He said Webasto's senior leaders did not want to relive the anguish and expense of an expansion only to have to close a plant and furlough workers in the next downturn.

"Is it the right thing for us to increase our fixed costs? All of us in the auto industry know that it is dangerous to do that because if the business goes down even slightly, you have a fixed cost increase," Roeren said.

After studying the layout of the company's plant in Rochester Hills, Michigan, near Detroit, Roeren saw a way to boost production without driving up costs. He would reconfigure that plant and operate it like a Webasto plant in Japan.

"I looked at the unproductive, nonvalue-added space in the plant and asked what could we minimize," said Roeren.

He said Webasto had been using a "supermarket-warehouse" style of logistics at the Rochester Hills plant, which makes glass sunroof assemblies. Roeren said the plant supplies automakers in North America.

On the plant floor, all the components to assemble a sunroof were stored on shelves within easy reach of workers on the production line. That's the supermarket. Those shelves were restocked from a warehouse of parts in another part of the plant.

Areas that were being used for storage, parts bins and maintenance equipment were cleared. Workers transferred the parts warehouse and nonproduction equipment to another building nearby. That increased floor space available for production by about 35 percent, enabling Webasto to install another production line.

To keep production running smoothly, Webasto now practices a form of just-in-time delivery. But instead of suppliers delivering the parts to the assembly line, Webasto employees bring parts from the warehouse just in time, Roeren said, from a building about two miles away.

"The one thing we looked at was moving our warehouse of parts, everything that would not need to be replenished in the span of one to two hours," he said. "That would move outside the plant to maximize the productive space inside the plant."

Since the change, production in Rochester Hills has increased 25 to 30 percent. The plant runs three eight-hour shifts a day five days a week and two shifts most Saturdays.

"From the business-case point of view, it was absolutely the right thing to do because now we have more flexibility to move production up and down with the business," Roeren said

The lasting lesson from the recession: "We learned how to do more with less."

Webasto Roof Systems CEO
Erik Roeren: 'Now we have more flexibility to move production up and down with the business.'